Full Year 2022 Telkom Indonesia (Persero) Tbk PT Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Hussaini Saifee - UBS Investment Bank, Research Division - Analyst : A few questions from me -- from my side. The Telkomsel revenues have stabilized in the last 2 quarters. So just wanted to understand how should we see the market share going forward for Telkomsel. And second is on the Orbit revenues. So just wanted to understand, were there Orbit revenues included in Telkomsel revenues? And what was Orbit revenues and subscribers at the end of 2022? And finally, on spectrum auctions. Any update on the spectrum auctions and timing related to that? And just a housekeeping question. Were there any one-off cost bookings in quarter 4? Unidentified Company Representative Okay. Thank you for the questions, Hussaini. On the revenue side, clearly, along with the relaxation of the people mobility post-COVID-19 and also the potential of digital economic growth, I think we should expect to have -- to grab more opportunities supported by better economic condition. However, we will also monitor the development of the market, including on the macro as well as the inflation impact on that side. On the strategic actions that we have implemented, as I already mentioned before, actually, we will maintain our market relevancy protecting our dominant market share position as the current, at least about 50%. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 28, 2023 / 8:00AM, TLKM.JK - Full Year 2022 Telkom Indonesia (Persero) Tbk PT Earnings Call In terms of the second question about the Orbit revenue. Our Orbit revenue already include in the broadband revenue recognition. And currently, our Orbit revenue is to serve the area that have the requirement of the broadband but not easily accessed by the IndiHome coverage. Unidentified Company Representative I will update it to the spectrum auction. Last year, November 2022, we have been officially announced as the winner also (inaudible) for the price mix and we use currently for the 4G. And I think most importantly, we just completed the refunding on 2.1. And as I mentioned before that we use our 4G or 5G for the 2.1. And maybe to the 700, I think we are still working from the (inaudible), so [with luck, hopefully] first half this year or second half of this year that the government will announce for the auction for the 700 spectrum. I think that's all from my side. Heri Supriadi - Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk - CFO, Director of Finance & Risk Management and Director Okay. On the cost side, there's no one-off cost booked in the last quarter of 2022. That's, I think, our answer on your question.

Question: Choong Chen Foong - CIMB Research - Analyst : A couple of questions from me. Firstly, on the mobile subscribers decline of 11% in FY '22, can you help me understand a little bit more on the impact that it has had on your revenue and EBITDA for Telkomsel? I mean are these revenue-generating subscribers that we have lost? And if so, what sort of ARPUs were they at? And in terms of the impact on the EBITDA, I'm thinking here that these subscribers probably were buying your SIM cards and you were incurring costs on those SIM cards and dealer commissions. So net-net at the EBITDA level, was it a net positive or net negative from losing these customers in FY '22? That's question #1. Second question for IndiHome. I wanted to get your thoughts on the outlook for net adds this year. And any plans -- or do you think there's any room to raise prices on the dual-play packages? And if we are banking on add-ons, what is the average speed for IndiHome subscribers as of the fourth quarter? And then my third question, how many staff retired in FY '22? You mentioned that there was quite a fair bit of natural retirement. And how many are expected to naturally retire? And in terms of salary increments, what are you budgeting for FY '23? Those are my 3 questions.

Question: Choong Chen Foong - CIMB Research - Analyst : And if I can just quickly follow up, what would you be budgeting for in terms of salary increments this year? I mean would we need to adjust the salaries upwards quite a fair bit for higher cost of living? And also just going back to the -- and if I can add one more question on dividends. Will Telkom be proposing to pay dividends based on the operating net income or on the reported net income? Heri Supriadi - Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk - CFO, Director of Finance & Risk Management and Director Okay. On the -- I think on the salary, we can say, actually, we basically have a natural increase based on the inflation rate. So I think our -- basically, our salary already competitive in the market. And then we pay also based on the performance, what is the performance going to be that's going to add some bonus on that one. And I think that's about how we see the salary (inaudible). And then on the dividend, we're going to propose -- of course, we need to pay a dividend based on the -- what is the reported net income. But we do calculate what is the dividend supposed -- dividend yield supposed to be in order to competitive in the market to the investors. So we're going to calculate what is the yield that's supposed to be provided to the shareholders. Based on that one, actually, we're going to increase the dividend percent this year compared to what we did last year. What we're going to propose is dividend by (inaudible) based on the reported net income, around 75% to 80% of net income. That's what we're going to propose. This -- with this, although based on the, I think, reported net income, this is going to increase compared to last year, I think.

Question: Hussaini Saifee - UBS Investment Bank, Research Division - Analyst : Maybe just one follow-up question on the recent partnership of Telkom with Ericsson on 5G, and it was linked to fixed wireless access. So maybe if management can throw some color on that side, that what will be the priorities on -- of the 5G rollout and how will it be monetized. Will the focus be more on the mobile side or will be on the fixed wireless sector? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 28, 2023 / 8:00AM, TLKM.JK - Full Year 2022 Telkom Indonesia (Persero) Tbk PT Earnings Call Unidentified Company Representative Okay. I [would like to repeat] that our partnership toward Ericsson for the 5G, for the FW, currently, we work together not only with the Ericsson, also with the (inaudible) to try the -- use the millimeter wave in the high-frequency band from the 60 gigahertz in 2 cities that we have there. And the other one related to the 5G rollout. Unidentified Company Representative Currently, we selected to deploy 5G based on business feasibility and economic market condition. And also, we take a look at the post-spectrum (inaudible) that we have, also relevant use case and device affordability in each city. Currently, we already have around 284 5G BTS, more than 40 cities that we're focusing on mid- to high residential area. And also in the enterprise market then that we built last year, we, altogether with Freeport, developed smart mining with the 5G standalone. And also we do the digital concept ecosystem with Java data as well as there also we deploy 5G. So case in Mandalika -- at Mandalika and G20 Summit. I think that's related to the 5G.